1/ My strategy is mean reverting, so I need enough bullets to keep me in the game. When I’ve used too many too soon, it’s constrains my ability to follow the strategy effectively. This week has been that.

2/ Like a lot of traders, I was long going into the potential 12k breakout. I had switched from mean reverting to trend following because of a few triggers that tell me not to fade. Luckily, I was unscathed and ended up giving back some unrealized profit but no loss at 11800ish

3/ I waited out the drop to 11.2, and at that point turned on my mean reversion strat to play the range. The macro market took precedent here and I quickly got blown through all my tranches and filled 2x leverage, which is uncomfortable.

4/ At this point I did not panic, while I was in the largest DD ever I was ready to be in a deeper one mentally and still making good decisions to average down effectively. Once we started to near 10k the first time I started to get worried, but continued to make decent choices

5/ What I did not count on is the mental drag. Several days of holding underwater and thoughts of complete liquidation start to creep in. I’d lowered my entry to 10.8, then 10.7, 10.6 and finally 10480, but at that point I was so levered my position couldn’t breathe.

6/ I managed to get back to breakeven on the account and while I did heavily delever, I made the crucial decision to follow my strategy, not entirely close at BE and that ended up putting me back underwater and the mental effect started to impede my decision making.

7/ I ended up taking a fat loss yesterday to reset my brain and position myself better, whether that’s the right decision at this point is all hindsight analysis so I won’t go there but essentially I wiped out my profits from 4 weeks of gains, around 10% ish of the account.

8/ Some takeaways for me: I’m going to tweak a few things to change how aggressively my tranches scale when I’m offside vs onside, what the decision making process is like when I’m back to BE after x% drawdown, and how aggressive my passive vs aggressive scaling is.

9/ Overall it wasn’t too bad an experience though I knew it was getting unmanageable once i had a few sleepless nights. the strategy is always going to be skewed left tail so it’ll be a matter of designing functional rules to continue minimizing that without impacting the profits

10/

11/ I still have a lot to learn from the master @SimpelAlpha , who made a killing in this environment!